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Colombia: Beginning the New Year with Tax Reform

Oil prices have decreased, this has brought several consequences to energy exporting nations. Even though Colombia is not one of the major produces, oil is one of the largest exportation products of the country. This is why multilateral organisms and risk agencies have advised the Colombian government to take action in this matter. 

Since October of last year, the Colombian government worked on what is the actual law 1819 of 2016. The law was quickly approved and implemented since January 1st, 2017. Now, this adjustment has brought important changes and serious impacts to Colombian economy.

A 3% VAT increase, is one of them, if not the most representative. In consequence, a rise in prices of some products that make up the basic necessities, for instance: house cleaning products, sauces and condiments and clothing. On the other hand, we have seen substantial changes on fuel, tabacco and liquor prices. Generally speaking, the main impact is on the rise of cost of living.

Besides the above mentioned, there is a more important aspect to take into consideration, which is the latest major change to arise. "The worst is now passed" experts say; "Now the country tax context can only get better. With this reform, Colombian governmet expects to notoriously reduce fiscal deficit within 2017 and 2022; and also expect to help Colombia's economy to keep current job vacancies and generate new ones. 

In conclusion, Colombian taxes reform was nothing but ncessary and good for the country. If results come as planned, the confidence in the country will increase, foreign investors will show confidence in Colombia, hence, the economy will get better and population will see benefits.

Written by Ana Maria Garcia

LARM Colombia 

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